ATR (Average True Range)
The ATR (Average True Range) is a technical analysis volatility indicator. It does not indicate the price direction, but rather the degree of price volatility. A high ATR indicates high volatility, and a low ATR indicates low volatility. Traders can use ATR to determine where to place their stop-loss orders. A higher ATR may warrant a wider stop-loss, while a lower ATR might be suitable for a tighter stop-loss.
Arguments
| Name | Description |
|---|---|
period | Smoothing period of EMA (integer greater than 0) |
Useful Signal Expressions
1. High Volatility
Signal:
atr(14).rising(3)
Explanation: The ATR with a period of 14 is rising for 3 consecutive periods, indicating increasing market volatility. This can be used to confirm breakouts.
2. Low Volatility
Signal:
atr(14).falling(3)
Explanation: The ATR with a period of 14 is falling for 3 consecutive periods, indicating decreasing market volatility. This might suggest a period of consolidation.
3. Volatility Spill
Signal:
atr(14).gt(atr(14).sma(50))
Explanation: The current ATR is greater than its 50-period simple moving average, suggesting that volatility is higher than its recent average.